ST. LOUIS, MO — John Young and Jim Abrams founded Con-tractor Success Group in 1990 and later founded Service Experts in 1996, growing the contractor group to $300 million in 18 months. The two men again collaborated in 1998 to begin VenVest, Inc., a venture capital firm that owns AirTime 500. Young and Abrams both hold the title of managing director in VenVest.

Young managed to take a little time away from the recent Airtime 500 Expo in St. Louis to talk with The News about some of the programs his contractor groups are involved with.

Simplifying Pricing

The Airtime 500 contractors have the opportunity to use a “tier pricing” system that breaks equipment service costs into a few simple levels of pricing. Young calls it “managing your unease.”

He also said that 95% of what is found wrong on service calls falls into one of the levels of service that Airtime 500 service techs explain to customers.

“Without common pricing, the service tech can sometimes take as much time to figure out the cost of the service call than to actually diagnose the problem,” he said.

Besides an effort to simplify pricing, Young believes that a structured tier of pricing can go a long way to alleviate fears of customers. “After all, how many people have any idea of service costs?” Young asked. “It’s better to have a clue before the process begins.”

That’s one motivation for asking service techs to begin at the top level, while explaining prices to customers.

“Get the customers to focus on the worst-case scenario,” Young added. “Most customers tend to think the worst, and the time right before the final price is announced is when a customer’s fear is at the highest.

“In most cases the price is lower [than the top tier] and the customer is relieved. The tech should be the bearer of good news.”

John Young is very passionate about helping hvacr contractors succeed in the business world.

Bigger Is Not Always Better

Young believes that many businesses reach a point where they become “unmanageable.” He said that just because a company has high revenues, doesn’t mean it has equally high profitability.

“It used to be that everyone wanted to grow a business to be real big,” he said. “But after you become big, what are you supposed to do with the business?

“A better way to manage the business is to simplify, rather than make it more complicated.”

Young used the $20 million company as an example. “I’d rather have ten $2 million companies than one $20 million company,” he said. “A $2 million company can be systemized and be made profitable.

“The truth is, most contractors don’t know how to systemize and run a profitable business.”

Young cited the Airtime 500 approach to “simplifying a business structure.”

He said, “Ours is a turnkey, systematic approach to running a business, which, by using a simple approach, leads to higher profitability.”

He likes to think that the smart business owner will have a lot of “mailbox money.” That’s when the owner can get up in the morning, collect money from the mail, and afford to spend more time away from the office, rather than being burdened by everyday problems.

Manufacturers Need To Help

Young strongly believes that contractors need to take a closer look at the current state of the hvacr industry and how products are making it through the distribution channel to the end user. He believes that manufacturers need to be scrutinized more.

“There are several manufacturers who are being counterproductive to contractors,” he said. “Some are selling equipment through discounters.”

Young added that despite the fact that contractors are being hired by big box companies like Home Depot and Lowe’s, they are falling into a trap. “The manufacturer’s goal is to turn you, the contractor, into slave labor.”

Young said there is too much apathy toward current relationships involving manufacturers. “I am angered that I haven’t seen a bigger outrage against manufacturers by dealers,” he said.

“I was taught to teach dealers that the reason they were successful was because of the brands they sold. But a lack of brand recognition doesn’t necessarily hurt the business.

“The way contractors are selling is the way manufacturers have taught them to sell — and that is not the most effective way. Sometimes a buying decision is based on what someone has heard, rather than actual product knowledge.”

Publication date: 07/16/2001